Custody Banks Like State Street and BNY Mellon Are Quietly Near Record Highs. Here's What's Driving the Rally.

Custody banks State Street, BNY Mellon, and Northern Trust are outperforming the broader banking sector, with gains of 26-32% year-to-date. These institutions benefit from rising assets under custody, increased trading activity during market volatility, and higher net interest income from reinvesting client deposits. BNY Mellon reported record Q1 revenue of $5.4 billion with 36% net income growth, driven by deposit surges and fee income increases.